DGP Trucking Co. v. Fopa Trucking Co.

• Court: Arizona Court of Appeals
• Writing for the Court: SCHROEDER; JACOBSON, P.J., and WREN
• Citation: DGP Trucking Co. v. Fopa Trucking Co., 547 P.2d 47, 26 Ariz.App. 195 (Ariz. App. 1976)
• Decision Date: 18 March 1976
• Docket Number: No. 1,CA-CIV,1
• Parties: DGP TRUCKING CO., Appellant, v. FOPA TRUCKING CO. (formerly John McCabe Trucking, Inc.), Pacific Motor Trucking Company, Thunderbird Freight Lines, Inc., Reliance Truck Co., Pima Transportation, Inc., Cement Transporters, Inc., and Svennson Freight Lines, Inc., Appellees. 3197.

Page 47

547 P.2d 47

26 Ariz.App. 195

DGP TRUCKING CO., Appellant, v. FOPA TRUCKING CO. (formerly John McCabe Trucking, Inc.), Pacific Motor Trucking Company, Thunderbird Freight Lines, Inc., Reliance Truck Co., Pima Transportation, Inc., Cement Transporters, Inc., and Svennson Freight Lines, Inc., Appellees.

No. 1 CA-CIV 3197.

Court of Appeals of Arizona, Division 1, Department B.

March 18, 1976.

Rehearing Denied April 23, 1976.

Review Denied May 25, 1976.

Richard J. Herbert, Phoenix, for appellant.

Evans, Kitchel & Jenckes, P.C. by Earl H. Carroll, Phoenix, for appellees Pacific Motor Trucking Co. and Thunderbird Freight Lines, Inc.

Otto H. Linsenmeyer, Phoenix, for appellee Fopa Trucking Co.

Yankee & Bernstrin by A. Michael Bernstein, Phoenix, for appellees Reliance Truck Co., Pima Transportation, Inc., Cement Transporters, Inc. and Svennson Freight Lines, Inc.

OPINION

SCHROEDER, Judge.

This is an appeal from a Superior Court judgment vacating the issuance by the Arizona Corporation Commission of a Certificate of Public Convenience and Necessity to the appellant. The trial court's judgment was based upon findings and conclusions of law that the Corporation Commission had acted arbitrarily, unreasonably and in excess of its authority by failing to give the appellees, who are other common motor carriers, an opportunity to rectify any inadequacy of service pursuant to A.R.S. § 40--607(C). We hold that the Superior Court's judgment must be affirmed. We further conclude that this is an appropriate case for the imposition of sanctions under A.R.S. § 12--2106 relating to frivolous appeals.

The underlying facts can be briefly summarized. In 1971, the appellant DGP Trucking Company (hereafter DGP) applied to the Corporation Commission for a Certificate of Public Convenience and Necessity authorizing it to operate as a common motor carrier to transport lumber and related building materials. The Commission held hearings on the application during 1972, and the appellees appeared to protest the application on the ground that the service appellees were providing was adequate and, therefore, prevented issuance of additional certificates under A.R.S. § 40--607(C).

The Commission entered its opinion and order granting DGP's application on December 18, 1972. The Commission's opinion included the following Findings of Fact relating to the adequacy of existing service:

'4. Two motor carrier inspectors from the Arizona Corporation Commission investigated shipper's complaints about poor service and found indications that there were instances of public difficulties in acquiring lumber haulers using flatbed equipment and who have authority to ship non-lumber related building materials on the same load.

'5. Representatives for two different shippers appeared as witnesses and offered testimony to the effect that their particular companies had experienced difficulties in acquiring lumber haulers using flatbed equipment and who also had authority to ship non-lumber related building materials on the same load.'

The Commission made the following Conclusions of Law:

'1. There is an inadequacy of service at the present time from existing carriers to serve the shipping public who require lumber haulers using flatbed equipment and who have authority to ship non-lumber related building materials on the same load.

'2. There is a present public need and necessity for lumber haulers using flatbed equipment and who have authority to ship non-lumber related building materials on the same load.'

On July 20, 1973, the Commission dismissed a petition for rehearing stating that its prior decision was correct and 'should remain in full force and effect.'

Appellees then filed appeals to the Maricopa County Superior Court, which were consolidated for trial conducted on March 21, 1974. While the transcript of that trial is not before us, the record does reflect that the only testimony offered was on behalf of appellees. DGP relied upon the record before the Corporation Commission which was placed in evidence.

The trial court, in setting aside the Commission's granting of the certificate to DGP, correctly held that the Corporation Commission was required to give existing carriers an opportunity to improve service before a new certificate could be issued to a competing common carrier. The Arizona Supreme Court has clearly set forth that requirement in Whitfield Transportation, Inc. v. Tucson Warehouse & Transfer Co., 78 Ariz. 136, 139, 276 P.2d 954, 955 (1954):

'During the past years this court has several times announced the law to be that under the provisions of . . . (A.R.S. § 40--607(C)), when an existing common carrier is serving a territory, no other competing certificate shall issue without first giving the existing carrier an opportunity to render such service as the commission might determine to be adequate and satisfactory. The opportunity and a subsequent failure to render the prescribed service are essential jurisdictional facts to empower the issuance of the second certificate. Arizona Corporation Commission v. Hopkins, 52 Ariz. 174, 79 P.2d 946; Betts v. Roberts, 63 Ariz. 337, 162 P.2d 423.'

This holding was reaffirmed in Corporation Commission of the State of Arizona v. Pacific Motor Trucking Co., 100 Ariz. 87, 412 P.2d 33 (1966).

DGP does not challenge the correctness of this principle of law. Instead it challenges the trial court's finding that the Corporation Commission did not in fact offer appellees an opportunity to improve service. The only issue presented is the sufficiency of the evidence:

'The test, therefore, is whether there is substantial evidence in...